The Centre will soon provide a policy push to the agenda of ‘interoperability’ among business correspondents (bank agents) if the Chief Economic Adviser Arvind Subramanian has his way.

The benefits of interoperability for the business of such agents has been highlighted in a new report released here on Wednesday.

The report — ‘State of the Agent Network, India 2017’ — has been launched by the Helix Institute of Digital Finance, the digital financial services arm of MicroSave. It was launched by Chief Economic Advisor to the Finance Ministry Arvind Subramanian.

This report highlights that the financial-inclusion drive in India has moved from opening of bank accounts to actual usage of financial services, driven mainly by agents.

The report is based on a nationally representative research that covered 3,048 business correspondents (BC) and was carried out in the second half of 2017.

It has brought to the fore that nearly a quarter of the bank agents in India do not conduct interoperable transactions.

For a BC, providing interoperable transactions means servicing account-holders of multiple banks. There are two challenges here: technology, and banks allowing BCs to perform this role.

Subramanian felt that a policy push for interoperability is warranted given that the report has highlighted that business volumes could go up by 3 per cent if this (interoperability) was complied with.

Interestingly, a significant proportion of the respondents said that their banks do not allow interoperable transactions.

The report highlighted that agents who offered interoperability earned higher median monthly revenues ($101 or around ₹6,500) compared with those who do not ($78 or ₹5,000).

Also, agents who offer interoperable services do around 25 interoperate transactions per month, which translates to 3 per cent of their total transactions. In metros, agents conduct 60 interoperated transactions per month, which is a little over 15 per cent of total transactions.

Structured products

Manoj Sharma, Managing Director, MicroSave, later told BusinessLine that bank agents need to be allowed to provide more structured products if their earnings/remuneration were to increase to more meaningful levels of, say, ₹10,000 per month.

There has to be policy decisions in this respect, he said, adding that gold-related lending products could be an example on this front.

One of the raging debates on BCs has been the insufficient monthly remuneration of bank agents, thereby prompting them to take up the role of non-dedicated agents.

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